Medicare office reverses reimbursement decision

November 5, 2009

The Centers for Medicare and Medicaid Services (CMS) reversed a reimbursement decision that would have forced clinicians to switch treatment for patients with wet age-related macular degeneration from bevacizumab to ranibizumab.

The Centers for Medicare and Medicaid Services (CMS) reversed a reimbursement decision that would have forced clinicians to switch treatment for patients with wet age-related macular degeneration (AMD) from bevacizumab (Avastin, Genentech) to ranibizumab (Lucentis, Genentech).

CMS spokeswoman Ellen B. Griffith said Oct. 27 that, beginning Jan. 1, ophthalmologists will work directly with their regional Medicare carriers to set appropriate payment rates for bevacizumab injections.

"From a physician's standpoint, we are restoring things to where they were before Oct. 1," Griffith said.

Both drugs are made by Genentech, a subsidiary of Swiss pharmaceutical giant Roche. Ranibizumab costs physicians $2,000 per dose, whereas bevacizumab costs $30 to $50 per dose. A $7 reimbursement meant clinicians would lose about $25 per dose under the new policy, unless they switched to ranibizumab.

"CMS' goal is to ensure Medicare and beneficiaries pay appropriately for services furnished to Medicare beneficiaries," Griffith said in early October.

"As required by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Medicare must pay for [bevacizumab] based on the manufacturer's average sales price plus 6%, and the payment rate for the new code for very small doses of [bevacizumab] reflects the average sales prices reported by Genentech to Medicare," Griffith said.

Fixing the situation

David W. Parke II, MD, executive vice president and chief executive officer, American Academy of Ophthalmology (AAO), said the revised decision allows ophthalmologists to continue to choose the medication they believe is best for their patients.

The AAO worked with the physician leaders of the American Society of Cataract and Refractive Surgery, the Retina Society, and the Macula Society to petition CMS to reconsider the decision.

"I applaud CMS for having admitted they made a miscalculation based on some incorrect assumptions, and [for taking] steps to rectify this reasonably once they were apprised," Dr. Parke said.

Switching to the higher-priced drug would have cost patients significantly more in Medicare co-payments, and meant risking a change in a treatment that is proving effective in protecting their vision from the leading cause of blindness in the elderly. The co-payment for a $30 dose of bevacizumab is $6, versus $400 for a $2,000 dose of ranibizumab. Injections are typically required every four to five weeks, Dr. Parke said.

"We're concerned about the ability of patients to have access to the drug they have been taking and that works for them," he said, adding that ranibizumab is not approved for some conditions, including central vein occlusion. It also would have meant a huge increase in Medicare costs-about $5 billion over 10 years -to cover about 1 million injections given each year for AMD, Dr. Parke said.

A Genentech spokeswoman said the company had no involvement in the CMS decisions.

"There are some practices with a large retina component that [were] looking at losses in the tens of thousands of dollars, and it became a financial hardship," Dr. Parke said.

Dr. Parke praised the involvement of Sen. Herb Kohl (D-WI), chairman of the Special Committee on Aging, who asked CMS in an Oct. 9 letter to explain its reasons for the change and any role that Genentech might have had in it.

"I absolutely believe that Sen. Kohl's impact was crucial," Dr. Parke said. "He and his staff, particularly Jack Mitchell, were instrumental in focusing CMS' attention to the unintended consequences [of the decision]."

Mitchell is chief of oversight and investigations, Special Committee on Aging, U.S. Senate.

The work is not done, however. CMS' revised decision states that the new policy takes effect Jan. 1, meaning ophthalmologists would be paid at the lower level for 3 months.

"What we're trying to do is get CMS to make this retroactive, if we can, to Oct. 1 or at least to the current date, because we don't feel that it's really appropriate for ophthalmologists to have accepted this much lower rate of reimbursement for their services for a period of a fourth of calendar year 2009, when CMS recognizes that [its] original decision was based on some flawed assumptions," Dr. Parke said.

"This [decision] was something that was clearly bad for patients, bad for CMS, and bad for physicians," he said.